By Kim Jae-won
Two consortiums — one led by Kakao, the other by KT — have been granted preliminary licenses to run Internet-only banks, allowing so-called fintech technologies to gain access into the traditional banking industry.
The Financial Services Commission (FSC) announced on Sunday that it had given the preliminary permits to run the web and mobile-based bank to the two consortiums, acknowledging their plans in offering innovative services.
Kakao operates the popular KakaoTalk app and the nation's second-largest portal site Daum. KT is the nation's second-largest mobile carrier.
A consortium led by e-commerce company Interpark failed to get a license due to its risky business model for lending money to small business owners.
The conclusion came from an independent screening committee consisting of seven experts in finance, information technology, legal and consumer sectors.
"Korea Kakao Bank is expected to run the business stably thanks to its KakaoTalk platform which may help it set up a customer base in the early stage," the committee said in a statement.
KakaoTalk has more than 40 million users. Korea Investment Holdings and KB Kookmin Bank also joined the consortium.
The committee's second choice was K-Bank, supported by KT, Woori Bank, GS Retail and Hanwha Life Insurance, for its wide range of channels to customers.
The two consortiums will start running their businesses in the second half of next year after getting a final license from the regulator by June.
Internet-only banks will offer the same banking services, including deposits, loans and foreign exchange business, through Internet and mobile platforms. The government has pushed for launching the Internet-only lenders, expecting them to create innovative services in the conservative banking industry.
The regulator also anticipates that the new type of financial services will give a boost to the banking sector suffering from low interest rates and sluggish growth.
The FSC said that Internet-only banks will focus on niche markets to which traditional lenders have not paid attention. They will include mid-rate loans based on big data, simple payment methods and asset management services using robot advisers.
This is the first time in 23 years that the government has given a preliminary license to run a bank. To get final approval, the two consortiums must run the bank with online-only methods and meet the same human resources levels and facilities as regular banks.
Two consortiums — one led by Kakao, the other by KT — have been granted preliminary licenses to run Internet-only banks, allowing so-called fintech technologies to gain access into the traditional banking industry.
The Financial Services Commission (FSC) announced on Sunday that it had given the preliminary permits to run the web and mobile-based bank to the two consortiums, acknowledging their plans in offering innovative services.
Kakao operates the popular KakaoTalk app and the nation's second-largest portal site Daum. KT is the nation's second-largest mobile carrier.
A consortium led by e-commerce company Interpark failed to get a license due to its risky business model for lending money to small business owners.
The conclusion came from an independent screening committee consisting of seven experts in finance, information technology, legal and consumer sectors.
"Korea Kakao Bank is expected to run the business stably thanks to its KakaoTalk platform which may help it set up a customer base in the early stage," the committee said in a statement.
KakaoTalk has more than 40 million users. Korea Investment Holdings and KB Kookmin Bank also joined the consortium.
The committee's second choice was K-Bank, supported by KT, Woori Bank, GS Retail and Hanwha Life Insurance, for its wide range of channels to customers.
The two consortiums will start running their businesses in the second half of next year after getting a final license from the regulator by June.
Internet-only banks will offer the same banking services, including deposits, loans and foreign exchange business, through Internet and mobile platforms. The government has pushed for launching the Internet-only lenders, expecting them to create innovative services in the conservative banking industry.
The regulator also anticipates that the new type of financial services will give a boost to the banking sector suffering from low interest rates and sluggish growth.
The FSC said that Internet-only banks will focus on niche markets to which traditional lenders have not paid attention. They will include mid-rate loans based on big data, simple payment methods and asset management services using robot advisers.
This is the first time in 23 years that the government has given a preliminary license to run a bank. To get final approval, the two consortiums must run the bank with online-only methods and meet the same human resources levels and facilities as regular banks.
